Caught Red-Handed

THE INDIRECT COSTS SCAM:

NO WRITER ATTRIBUTED
May 20, 1991

HARVARD has been caught with its hand in the cookie jar.

At a time when higher education leaders have been crying about the scarcity of federal research funds, Harvard was using some of its "desperately needed" federal money to pay for a retirement party for a senior dean and for costs associated with President Derek C. Bok's home.

Harvard is not alone in its malfeasance. Stanford, MIT, and many top universities have been hit by a federal probe into "indirect cost" disbursements and have come away red-faced after using taxpayers' money for frivolous purposes. (Indirect costs are those paid to universities' administrations above and beyond funds that go directly to individual researchers.)

Harvard's decision last month to withdraw $500,000 in indirect cost requests was only a first step. Like the University's decision this winter not to participate in the financial aid overlap group (which is the target of a Justice Department inquiry), the refund was preemptive, designed to shed the appearance of impropriety. Sixteen other universities have similiarly admitted improper billings in order to avoid paying fines.

SO the government gets a few million back this year. But how long have Harvard and other schools been overcharging the government? From what is already known, it appears that many worthy medical causes--like AIDS, cancer and cystic fibrosis--might be receiving greater research support if the federal government were not pouring millions into illegitimate overhead charges.

The government is also at fault here. For years, it has failed to keep a watchful eye on university billing practices. In fact, the Navy has been a target of a federal investigation into its regulatory practices at Stanford.

But Harvard and other research universities must do everything they can to restore the public's trust in their handling of government money. A good start would be for Harvard to release a full accounting of its indirect cost requests for past the past five years and to disclose the results of study on the topic that a private firm completed this spring.

If the federal government thinks its money is being misused by academia, it will invest it elsewhere--perhaps in airfare for top Bush Administration officials. The loss of funding would be a disaster for the academic community, and universities would have no one to blame but themselves.